WASHINGTON -- One of the highest performing companies in which the private equity firm founded by Mitt Romney invested is now a top target of the most vehement anti-abortion groups in the nation.
Stericycle, a massive medical waste disposal service company, received a $75 million investment from Bain Capital in 1999 and soon became an industry leader. Today, it has more than 485,000 customers worldwide. Its clients include hospitals, blood banks, and pharmaceutical manufacturers. But it has also helped dispose of medical waste from Planned Parenthood and abortion clinics -- waste that included aborted fetuses -- and that has attracted the ire of the pro-life community and establishment Republicans.
Romney's relationship to the company, which was flagged by the Democratic opposition research group American Bridge and further examined through an independent review of documents, is tangential. By the time Bain Capital had made the investment in Stericycle, he had left the firm to run the 2002 Winter Olympic Games. He maintained ownership in Bain and kept holdings in its private equity funds, which included Stericycle stock, but he had no say in the managerial or strategic decisions at the firm, according to Bain officials.
But at a time when Romney is attempting to sell South Carolina voters on his pro-life record -- running values-themed radio ads and defending himself from attacks that say he governed as pro-abortion lawmaker -- the link between Stericycle and Bain could still cause him problems.
"It is pretty significant. A lot of these companies, unfortunately, don't know what is going on," said Michael Marcavage, director of the Campaign to Stop Stericycle, an offshoot of the evangelistic organization Repent America. "You need to put morality before money and a lot of these companies need to look at who they are investing with ... Just imagine if the company was involved in discrimination against blacks? Who would want to be involved in that?"
"If they knew that was going on and still looked at it as a business venture we would certainly speak heavily against it," Marcavage added.
Stericycle's work with abortion clinics constitutes a "small" portion of its overall operations, an official with the company told The Huffington Post (the official declined to confirm whether or not Planned Parenthood specifically is still a client). And anti-abortion activists' decision to target it seems misdirected; what would those clinics be left to do without the services provided by Stericycle and companies like it?
There is no publicly available data showing that either Romney or other officials at Bain knew of Stericycle's work with Planned Parenthood and abortion clinics before the investment. Nor would it be unreasonable if they knew about it and found it irrelevant. Bain, after all, is not a religious outfit, unless the religion is money-making.
The Romney campaign did not return a request for comment.
Bain's $75 million investment in the company was announced in August and finalized in November of 1999. An official with the firm told The Huffington Post that such deals are usually planned three or four months before the announcement date, which means it was likely conceived of after February 1999, when Romney left for the Olympics. The first reported documentation of Stericycle servicing an abortion clinic came in 2003, one year before Bain sold its stake in the company.
Repent America itself only became aware of the issue in 2010, when it was reported that Stericycle had picked up “biohazardous waste” at an abortion clinic in Richmond, Virginia. The group subsequently put pressure on Penske and Ryder, the truck-leasing companies that Stericycle had hired, to stop working with the medical waste disposal company.
More than suggesting Bain's indifference to the abortion debate, the story the firm's involvement with Stericycle illustrates how the private equity chapter of Romney's career has complicated his political ambitions. Every company Bain has invested in has a story of its own, whether it's the use of generous tax breaks and government subsidies to build a steel company in Indiana or the rapid growth of Staples.
With Stericycle, that story is as much about leveraging money to make more as the politics of abortion.
The company was only a decade old when Bain began contemplating an investment. What the private equity firm found alluring was that Stericycle had a straightforward, fairly fail-safe strategy for growth. The waste and recycling behemoth Allied Waste Industries had spent $10 billion to acquire Browning-Ferris Industries in 1999 and was looking to sell its medical waste department in order to pay off the debt from that acquisition. Stericycle decided it would buy that division, which was, at the time, the country's largest. The company just needed help with funding. In stepped Bain and another private equity firm, Madison Dearborn Partners.
On paper, it was a win-win situation. By consuming its number one competitor, Stericycle became the largest company in the industry. It added 200,000 new customers, saw a reported 266 percent increase in revenue within a year and was named the tenth-fastest growing company in the country by Fortune magazine. According to SEC data, it would go on to make more than $900 million in profits during the Bain years, from 1999 to 2004, and employment would increase by 1,200 -- owed largely to the company taking on workers from Browning-Ferris Industries.
The deal was good for Bain too. According to an investment prospectus from December 2003, the return rate that Bain received on its investment in Stericycle was approximately 66 percent, or 49.5 million dollars.
Romney had become governor of Massachusetts by then. But according to financial disclosure reports flagged by American Bridge and a review of SEC data, both he and his wife maintained investments in Bain Capital funds, including ones that had the Stericycle stock.